Orange Clockworks Company

ORANGE CLOCKWORKS COMPANY

Summary of Important Facts

Orange Clockworks Company (OCC) is losing its position of market leadership. Sales leveled off in the early 1990s after a history of steady increase. Actual sales in 1993 were $ 5 million less than the $ 22 million projected. The condition worsened in 1994 when sales dipped another $ 1 million. OCC executives see the cause as a trend away from alarm clocks to clock radios. OCC did not become aware of the trend until they had lost their market position. The vice president of marketing blames the lost sales on an inadequate marketing budget and lack of R & D by manufacturing. The vice president of manufacturing claims that marketing did not understand their customers well enough to anticipate their needs. The vice president of finance does not believe the problem to be lack of money. Rather, he mentions the difficulty that finance had working with the other functions in long-range planning.

Problem

The problem is the lack of a long-range planning activity within OCC. This problem seems to be caused primarily by an inability of the president and the vice presidents of marketing and manufacturing to see the importance of such planning.

Lack of communication among the executives is also a factor. The vice presidents of marketing and manufacturing do not seem to work well together, and the vice president of finance apparently never communicated to the other executives the problems that were encountered when the attempt at long-range planning failed.

Lack of a long-range plan has resulted in a lack of objectives and performance standards for the OCC organization. OCC has no yardstick against which to measure its performance other than sales volume and such financial measures as cost of goods manufactured.

The use of computing is another condition within OCC worth noting. The computer applications are limited to data processing and there is no evidence that computer systems have been...